Healthcare Tax Gimmick

by Chidem Kurdas

Yesterday at a news conference  President Obama laid out his view of the healthcare bill being hammered out in Congressional committees. One could question many of his statements—although the members of the press picked to ask questions did not. So as not to write a post of inordinate length, I’m will focus on just one point.

Mr. Obama says that savings will take care of about two-thirds of the cost of the new entitlement program. “The remaining one-third is what the argument has been about of late,” he says.  For the sake of the argument, let’s stay with that.

The one-third of the money is to come, in one form or another, from the rich—or those so defined. The President says he’s OK with the House proposal to add a surcharge  to families with a joint income of a million dollars. He emphasizes how important it is that the middle class not be saddled with this additional burden.

Why the Catholic Position on Homosexual Marriage Is Not Mere Bigotry (But Still Is Mistaken)

by Gene Callahan

“Summum autem bonum si ignoratur, vivendi rationem ignorari necesse est.”* — Cicero

My friend Roger Koppl, in a recent discussion on this blog, contended that the only reason anyone might object to legalizing gay marriage is “bigotry.” Now, it is always a good bit o’ fun to insult one’s political opponents like this, but it may not always be helpful. So, I wish to take a moment here to demonstrate that at least the Catholic position contra gay marriage is not based on mere bigotry.

Unintended Consequences of Mortgage Foreclosure

by Mario Rizzo  

We are a serious bunch here at ThinkMarkets. We make major advances almost daily in all recognized realms of intellectual thought. So now it is time to illustrate the great principle of unintended consequences of human behavior in a very vivid way.  

A brilliant new horror movie was released on May 29th: Drag Me to Hell. It is the story of an ambitious bank loan officer who is keen to get a promotion. Her superior is looking for someone who can make difficult, but profit-maximizing, decisions. Enter now an old lady who has missed payments on her home. She had already been given two opportunities to make up for delays in paying her mortgage. Now she wants a third. The bank officer struggles with the matter – pitting her natural benevolence against the justice of contractual obligation. Since acting on the basis of the latter will improve her chances for promotion, she denies the woman’s request. At that point, all hell breaks loose.   

Forget issues of aggregate demand and wealth effects. Attend, instead, to the perverse multiplier of selfishness. If you like Ayn Rand this movie will drag you to hell.

Stumbling on profit opportunities

by Sandy Ikeda

I’ve been thinking about the following from Daniel Gilbert’s Stumbling on Happiness:

Experiments have demonstrated that the moment we encounter an object, our brains instantly analyze just a few of its key features and then use the presence or absence of these features to make one very fast and very simple decision:  “Is this object an important thing to which I ought to respond right now? […] As such, our brains are designed to decide first whether objects count and to decide later what those objects are.  This means that when you turn your head to the left, there is a fraction of a second during which your brain does not know that it is seeing a wolverine but does know that it is seeing something scary (Emphasis original, p.62).

Epistemic monopoly may let the bad guys get away

by Roger Koppl

The Chicago Tribune gives us another example of the trouble with epistemic monopolies.  They uncovered a case in which the police in the Chicago area city of Harvey, Illinois ignored a DNA match in a rape case.  In two other rape cases they did not submit the rape kit for analysis. 

Madison expressed the liberal dilemma in Federalist 51: “In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”  We should count the risks of epistemic monopoly among the dangers poised by the police powers of the state.  Short of full anarchy, which I don’t personally accept anyway, how could we introduce epistemic competition to municipal policing?

Welcome Richard Epstein

by Mario Rizzo

 

Those of us at ThinkMarkets are very happy that Richard Epstein will be teaching at the NYU School of Law on a long-term basis beginning in 2010. He has been visiting NYU for a few years now during the Fall semester. Just yesterday he spoke at our colloquium: The Colloquium on Market Institutions and Economic Processes. He will be a great asset to the University.

Deregulation and the Crash of 2008: Was Greenspan right?

by SANDY IKEDA

When Alan Greenspan blamed deregulation for the Crash of 2008 many libertarians scrambled to denounce the former Fed chairman as a hypocrite or nuts or both. And in defense of the free market, some invoked “the dynamics of interventionism,” the popular interpretation of which is that the expansion of government control generates negative unintended consequences that tend in turn to provoke further government controls.

For what it’s worth, lately I’ve realized that these responses are probably wrong: What we’re going through right now is at least partly the result of deregulation – or to use my preferred clunky term “disintervention” – and less the result of the expansion of intervention. So how does that not make me a hypocrite or nuts or both?